We chat about the various aspects of the planning and execution that can go wrong. From horribly wrong, with losses incurred, to subtly wrong, with resale threatening an investor’s profits, here are some of the common things that investors get wrong:
1. Buying in the wrong location
2. Buying the wrong property and paying too much
3. Buying with the wrong people
4. Buying for the wrong reasons
5. Buying with inadequate planning
6. Buying an investment property for the wrong reasons
Property can be such a powerful asset class, but we’ve seen plenty of people make mistakes buying for the wrong reasons. It happens often! We’ll chat in detail about the following mistakes:
• Buying for tax benefits – depreciation and Land to Asset Ratio
• Buying due to social pressure
• Buying for children
• Buying a holiday house
• Purchasing a home for your future self
• Buying with the idea of getting rich quick
You may wonder what’s wrong with some of these! We will dive into why they’re pitfalls.
We also share four ways to manage risk:
1. Manage debt – ignorance is not bliss when it comes to financial obligations! Be familiar with the lender(s), terms, and repayment status of your liabilities.
2. Stop worrying what others think – spending on stuff that isn’t really needed rarely helps the cause, so don’t go broke trying to look rich.
3. Read widely – educate yourself. Try to challenge your own preconceptions.
4. Diversify – the future is far less predictable than we tend to think, therefore all your eggs should not be in one basket.
